Robertson's Radiology Center (RRC) performs X-rays, ultrasounds, computer tomography (CT) scans, and magnetic resonance imaging (MRI). RRC has developed a reputation as a top radiology center in the state. RRC has achieved this status because it constantly reexamines its processes and procedures. RRC has been using a single, facility-wide overhead allocation rate. The vice president of finance believes that RRC can make better process improvements if it uses more disaggregated cost information. She says, "We have state-of-the-art medical imaging technology. Can't we have state-of-the-art accounting technology?"

1.	Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis.
2.	Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI if RRC allocated overhead costs using activity-based costing.
3.	Explain how the disaggregation of information could be helpful to RRC's intention to continuously improve its services.

Robertson's Radiology Center Budgeted Information for the Year Ended May 31, 2020
	X-rays	Ultrasound	CT Scan	MRI	Total
Technician labor	$61,000	$85,593	$71,512	$103,000	$321,105
Depreciation	28,000	270,000	442,000	900,000	1,640,000
Materials	22,200	16,200	23,900	30,800	93,100
Administration					20,610
Maintenance					246,000
Sanitation					253,000
Utilities					122,600
Total	$111,200	$371,793	$537,412	$1,033,800	$2,696,415
Number of procedures	3,840	4,400	3,000	2,500
Minutes to clean after each procedure	10	10	15	30
Minutes for each procedure	5	15	20	40

RRC operates at capacity. The proposed allocation bases for overhead are:

Administration	Number of procedures
Maintenance (including parts)	Capital cost of the equipment (use Depreciation)
Sanitation	Total cleaning minutes
Utilities	Total procedure minutes

Requirement 1. Calculate the budgeted cost per service for X-rays, ultrasounds, CT scans, and MRI using direct technician labor costs as the allocation basis.

Start by calculating the budgeted overhead rate for total indirect costs based on total labor. First select the formula, then enter the applicable amounts and calculate the rate. (Round your answer to two decimal places, X.XX. Abbreviations used: DC = Direct cost, DL = Direct labor, $ = dollar.)

Total indirect costs Total technician labor cost =Budgeted overhead rate $642,210 $321,105 = $2.00 per DL $

	X-rays
Technician labor	$61,000
Depreciation	28,000
Materials	22,200
Indirect costs	122,000
Total budgeted costs	$233,200
Budgeted cost per service	$60.73

Ultrasound

$85,593

270,000

16,200

171,186

$542,979

$123.40

CT scan

$71,512

442,000

23,900

143,024

$680,436

$226.81

MRI

$103,000

900,000

30,800

206,000

$1,239,800

$495.92

Requirement 2. Calculate the budgeted cost per service of X-rays, ultrasounds, CT scans, and MRI if RRC allocated overhead costs using activity-based costing.

Begin by calculating the cost driver rate per activity. (Round the answers to five decimal places, "X.XXXXX".)

	Cost		Total quantity of cost driver	=	Cost driver rate
Administration	$20,610		13,740	=	$1.50	per procedure

Maintenance

246,000.

1,640,000

=

$0.15.

per $ of depreciation

Sanitation

253000

?

=

?

per cleaning minute

Utility

$20,610

?

=

?

per procedure minute